Who's made Lm100 million in profits?

The lifeblood of any economy is company profits. If banks' profits are the yardstick, we could not hope for a more vibrant economy.

On the calculated assumption that Bank of Valletta plc (BOV) will earn as much in the six months ending September 30, as it did in its first six months to March 30 this year, BoV's full year pre-tax profits, at Lm48.6 million, will be a staggering Lm7.2 million more than the Lm41.4 million full year 2006 profits of HSBC Bank Malta plc (HSB).

We congratulate BoV and must say that it feels good to see HSB playing second fiddle. So just the big two's pre-tax profits will total a whopping Lm90 million.

The other two listed banks, Lombard Bank plc (LOM) with Lm3.9 million and FIMBank plc (FIM) with Lm1.5 million, add a further Lm5.4 million. To take the total over the Lm100 million mark, we just have to add the pre-tax profits of two unlisted banks - APS's Lm3.1 million and Volksbank's Lm2.9 million.

Years back we had heard some noises of the former going public. Why not now? For both of them! After all, another listed company in the financial services sector, GlobalCapital plc (GCL) had virtually identical pre-tax profits of Lm3.17 million for 2006.

Surely both would benefit immensely - and not just from the exposure to be gained by having their share price quoted in the daily financial news. Not to mention the blood transfusion it would give to the Malta Stock Exchange.

It could certainly have used it last week, when equity turnover by value totalled less than half a million liri (Lm478,453) with 182 deals struck. Of the 14 listed equities, eight ended the week in negative territory, two were unchanged and two did not trade.

Only two small caps ended the week in the plus column - Middlesea Insurance plc (MSI) and Medserv plc (MDS), up 2.7% and 2%, respectively. The week's worst performer slot was filled by Malta International Airport plc (MIA), down 3.2%, although BoV nearly squeezed in with its 3.1% drop. The MSE index ended the week down 1.3% to 4,903.7.

BOV went into reverse gear as the week started, dropping 4c8 at Lm3.75. However, investors wanting to buy this equity before it turned XD pushed the price back up to the Lm3.79 level, at which price it closed on Monday.

On Tuesday, as expected, the price slipped as the equity traded XD: the opening deals were effected at Lm3.74, sliding down to a Lm3.70 close. Wednesday saw the downward trend persist as BOV opened at Lm3.651 and traded consistently lower, touching an intra-day low of Lm3.581.

It then bounced back to Lm3.639 in the next trade, to fall back to Lm3.60 for the final deal. Thursday saw Wednesday's losses reversed as BOV opened at Lm3.639 and strode ahead to close at Lm3.67. Trading was fairly contained on Friday with just over 6,600 shares changing hands in a range of Lm3.67-Lm3.69, closing at Lm3.68, to end the week a disappointing 3.1% down.

For the second week running, BOV was the most active equity: total turnover amounted to 65,220 shares for a market value of Lm241,270 - half of the week's total equity turnover. At the end of the week, total bids for 1,476 shares were at Lm3.655, whereas offers of 2,450 shares started at Lm3.68.

HSB opened the week minimally lower at Lm1.945, but immediately regained the 5 mils lost to trade at Lm1.95 for the rest of the day. Monday's turnover of 24,229 shares was 400 shares more than the whole of the previous week's total number of shares traded.

On Tuesday, the price again fluctuated between Lm1.94 and Lm1.95, closing unchanged. Wednesday's slow trade saw all deals struck at Lm1.95. On Thursday, sustained selling saw the price sink to Lm1.90, with the last deal struck at Lm1.905.

However HSB regained its poise on Friday, almost immediately bouncing back to Lm1.95, to close the week unchanged. Turnover for the week totalled 97,430 shares for a value of Lm188,603. At the end of trading, bids for 260 shares were at Lm1.94, and the best offer for 6,718 shares stood at Lm1.95.

Maltacom plc (MLC) was, as the cliché goes, conspicuous by its absence in the early part of the week - or to use the phrase in the trade, "not in a position to respond". It did not trade on Monday while a puny 195 shares were matched at Lm1.48 on Tuesday, 1c lower than the previous Friday's close.

It was again silent on Wednesday. Only 1,400 shares traded on Thursday, opening at Lm1.46 and closing at Lm1.48. Friday was the week's 'busiest' session, with all of 3,000 shares trading.

MLC slid to Lm1.45 to close the week 2.7% lower. The week's total turnover of just 4,595 shares for a value of Lm6,703 was, surprisingly, not the lowest for 2007, but the third lowest.

At the end of trading, best bids totalled 1,000 shares at Lm1.42 with a supply of 500 shares at Lm1.46.

MIA first dealt on Wednesday, slumping to Lm1.365 and falling lower to close the day at Lm1.34, 4% down on its previous closing price. Volume however was slim, with just 2,150 shares traded.

One trade for 450 shares was effected on Thursday at Lm1.343 and the going was similarly dry on Friday with another solitary trade for 1,000 shares at Lm1.35. This price was 3.2% lower than the previous Friday's to make MIA the week's worst performer. At the end of the session, best bids were for 1,000 shares at Lm1.35 while offers for 1,000 shares started at Lm1.379.

International Hotel Investments plc (IHI) opened Monday 1c down at €1.08 but was back at €1.09 for the day's second and final deal to close unchanged. It only dealt again on Friday, back to €1.08 on a 2,700-share trade, thus ending the week 0.9% down.

FIM only traded on Monday and Tuesday, starting out US$1.95. On Tuesday it slipped a minimal 0.3% to $1.945 in the day's only deal for 6,842 shares.

For the first time in two months, MSI ended the week in positive territory. It was the week's best performer - up 2.7% to Lm1.90. Turnover however was very slim, with just 1,000 shares exchanged on Friday.

The only other positive performer was MDS, which only traded on Tuesday; it continued to push ahead, up 3c or 2% - to an all-time high of Lm1.50, since its October 23, 2006, listing at Lm1.30. This however was on a small turnover of just 3,000 shares.

After a fortnight's absence, LOM traded on Friday. A number of very small deals - 11 - took place for a turnover of 3,450 shares for the day. The opening deals saw the price plunge 4.1% to Lm4.699, dropping to a mid-session low of Lm4.649.

However, LOM rebounded in the final two deals, springing back to Lm4.78 and then to Lm4.80 to close the week 2% lower.

GCL traded on Tuesday, shedding 5c to Lm1.90 on an insignificant 50-share deal. It only traded again on Thursday, opening a further 5c lower at Lm1.85 but recovering to Lm1.90 by the close to end the week 2.6% cheaper. Simonds Farsons Cisk plc was stable at 85c in three small deals totalling 537 shares on Friday.

Grand Harbour Marina plc (GHM) dropped 5 mils to 75c on Wednesday's single trade for 1,000 shares. On Monday GHM announced that the board had approved the financial statements for the year ended December 31, 2006.

These, GHM's first as a listed company, show revenue at Lm1.52 million, profits before tax of Lm491,236 and earnings per share of 3c. GHM also announced the appointment of Dr Louis DeGabriele as company secretary, and set the AGM for June 5.

In addition to the ordinary business, the AGM will also be asked to consider and resolve on the matter of the proposal by Camper & Nicholsons Marina Investments Ltd to acquire company shares.

In the Government bond market turnover by value was abnormally high, reaching Lm9.24 million, with 21 issues traded. One deal for Lm7 million in the 5.75 MGS 2010 (ii) accounted for 78.6% of this figure.

The corporate bond market was also busier than usual with 50 deals completed for a total turnover value of Lm253,655. Turnover value in the Treasury Bill market totalled Lm298,862.

Financial Planning Services Limited is licensed by the MFSA to provide investment services, including stockbroking (IS/3608). The company is involved in acting as sponsoring stockbroker and corporate stockbroker. The directors or related parties, including the company, and their clients, are likely to have an interest in securities mentioned.